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Over a three day period last week, the country of Bolivia hosted a forum focused on natural resources. While Bolivia has a strong resource base with ample reserves of silver, tin and natural gas, many of the participants of the forum came to learn more about the world’s hottest new commodity: lithium. Bolivia sits on 5.4 million tons of the element (used in making lithium-ion batteries), approximately 50% of the world’s reserves.

At that forum, Bolivian President Evo Morales made some clear statements about his vision of the lithium industry. Specifically, he warned that lithium will not become a “new chapter” in his country’s “history of pillage and poverty.” And Morales admonished future foreign investors to become “partners—not owners—of the lithium industry.”

“If we don’t take measures,” he added, “we will never change Bolivia. We will continue down the path of pillage. We cannot repeat another Cerro Rico de Potosi (Bolivian silver mine that was recently shut down), neither in lithium, nor iron ore, nor oil.”

Evo Morales nationalized the entire Bolivian oil and gas industry and most of the mining industry since he assumed power in 2006. And his government recently ordered the partial suspension of the mining activities in Cerro Rico, a mine currently owned by Coeur d’Alene (NYSE:CDE), but which has been operating for almost five centuries.

Bolivia’s lithium reserves, purported to be the largest in the world, are located in an enormous salt flat known as “El Salar de Uyuni.” At the natural resource forum, Morales declared that he believes that Bolivia will produce 30,000 tons of lithium carbonate annually starting in 2013 (the global demand today is 70,000 tons, much of it being supplied by neighboring Chile). He further declared that the lithium industry will be 100% state-owned and that will cost US$350MM to build the lithium carbonate plant.

At a future stage, Bolivia plans to develop a battery plant and perhaps, in conjunction with foreign firms, battery-powered automobiles, but this will require an investment of US$1 billion. Insofar as how foreign firms could participate in the lithium industry, Morales assured the participants that there would be “clear laws” regarding investments and returns, but he did not offer a time table on when they would be announced. And he was clear that the Bolivian state would own the lithium industry, while foreign companies need to accept the role of “partners not owners.”

It is increasingly clear that lithium will have a valuable role in the “green revolution” sweeping the world. One interesting, albeit expensive, way for investors to play lithium is SQM, a US$9 billion Chilean firm that trades on the NYSE. SQM is mainly a fertilizer company (potassium nitrate, sodium nitrate, etc), but it also has a robust lithium carbonate business. It seems that investors have “re-discovered” SQM, as the company’s stock rose from $18 to $40 per share this year. While it's a good lithium play, it may be a bit expensive.

The stock is trading at a FV/EBITDA of 16x.